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Could Computing: Where is the rain?

Kishore S. S. Swaminathan | Nov. 11, 2010
Cloud computing makes traditional IT better, faster and cheaper and it has the potential to change both the business and IT landscapes in fundamental ways.

Practically any human experience you can think ofwhether its a vacation, a stint at the hospital or just living your average humdrum dayinvolves products and services provided by multiple companies. Today, companies provide discrete products and services that we, as individuals, manage and orchestrate. The ability to flexibly weave together a business process with services from multiple companies around an individual and his or her life (as the travel industry does today) seems like a strong driver in the business-to-consumer world.

Much as an individuals life involves touchpoints with multiple products and services, almost every process in organizations also involves interactions with multiple business partners. Today, each business partner sells a discrete product or provides a discrete service, and organizations manage and orchestrate these internally (procurement or supply chain management, for example).

Cloud computing makes it considerably easier for companies to configure business processes that integrate internal components and many external components into complex yet fluid processes around their business needs. This seems like a strong driver in the business-to-business world.

Prediction 2: Cloud computing provides an exoskeleton model for IT capabilities as opposed to the endoskeleton model we use today. As a result, fragmented industries (which are collectively underserved by IT today)construction and education, to name a couplewill become attractive white spaces for technology and service companies to fill.

The current IT paradigm may be called an endoskeleton model of IT: Data centers and applications support a company from inside its firewalls. As such, to a large extent, only big companies have had the need and the ability to run complex data centers and applications. Consequently, large companies have been the traditional targets for large hardware, software and service companies.

Cloud computing provides an exoskeleton model of IT: Data centers and applications can support a company from outside its firewalls. This simple change is significant for two reasons. Smaller companies can have access to sophisticated IT capabilities without incurring the overhead of running an IT shop; at the same time, enterprise IT companiesfor which small companies were not attractive targets under the endoskeleton modelcan now provide IT capabilities such as hardware, software and services to thousands of small companies from outside and thus achieve scale.

Interesting, but how important a development is this for businesses and the IT industry as a whole?

There are many fragmented industries and groups of public-sector entitiesconstruction, education, health care, legal and small municipal governments, to name a fewwhere the industry as a whole is large but the companies that make up the industry are relatively small. They are large in the aggregate but fragmented to the point that they are not an economically viable market for large enterprise IT vendors.

 

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